GBP/USD Continued Its Slide Below 1.6100 As UK PMIs Missed Estimates
- UK Services PMI (Sep): 58.7 Actual Vs 59.0 Estimated; 60.5 Prior.
- UK Composite PMI (Sep): 57.4 Actual Vs 58.2 Estimated; 59.3 Prior.
- GBP/USD Continued to Slide As Services and Composite PMI Disappoints
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According to Markit, the UK Services PMI came in at 58.7 in September compared to 60.5 in the prior month. It fell short of market expectations of 59.0. Moreover, UK Composite PMI dropped in at 57.4, which was again slower expansion compared to 59.3 in August. It missed estimated calling for a print of 58.2.
Before the release of the figures, the British Pound hit a session low against the US Dollar to trade below the psychologically significant 1.6100 level. Subsequent to the release, GBP/USD continued to slide to trade at new session lows.
Looking ahead, the spotlight will transition to September’s USD Non-Farm Payrolls and Unemployment Rate figures, which will cross the wires at 12:30 GMT today. The consensus is for a reading of 215,000 monthly change in employment excluding the farming sector and unemployment rate to remain unchanged at 6.1 percent. Better-than-forecasted numbers will bode-well for the US Dollar benchmark currency as it took a breather yesterday as investors measured the pace of rate increases by the Federal Reserve to come later rather than sooner. Moreover, strong prints may potentially cause the US Dollar to rally for a 12th consecutive weeks.
From a technical perspective, DailyFX Currency Strategist Ilya Spivak mentions near-term support to rest at 1.6088 (38.2 percent Fibonacci Expansion) and resistance at 1.6255 (23.6 percent Fibonacci Expansion). He is short the cable at 1.6233, initially targeting 1.6088. Meanwhile according to DailyFX Speculative Sentiment Index, the ratio of long to short positions in the GBP/USD stands at 1.47 as 60 percent of traders are long.
GBP/USD 5 Minute Chart
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Edward Hyon, DailyFX Research Team
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